To acquaint the students with the methodology and approach of Microeconomics; and to understand the behaviour of an economic agent, namely a consumer and a producer in a comparative static and partial equilibrium framework.
9.00
Unit I:
Cardinal Utility Analysis
Utility : Meaning & measurability
Total and Marginal utility;
Law of diminishing marginal utility;
Consumer’s equilibrium – law of equi-marginal utility.
Consumer’s surplus – Marshallian Concept.
9.00
Unit II:
Ordinal Utility Analysis
Indifference curves : Characteristics, MRS
Budget line : Slope & shift
Consumer’s equilibrium.
9.00
Unit III:
Topics on Consumer Behaviour
Income consumption curve, Price consumption curve
Price, substitution and income effect: Normal, Inferior and Giffen Goods (Hicksian Approach);
Engel’s Curve : Derivation of Engel’s curve & demand curve from IC analysis
Elasticity of demand: Price, Income and Cross – meaning & measurement;
9.00
Unit IV:
Theory of Production I
Short Run production Function
Total, average and marginal product curves; interrelationships
Law of returns to variable factor
Stages of Production and Rational production decision
9.00
Unit V:
Theory of Production II
Long Run production Function
Isoquants ,Iso-cost and Producer’s equilibrium;
Expansion Path and Ridge Lines;
Law of Returns to scale
Essential Readings:
Ahuja,H.L. Modern Microeconomics: Theory & Applications , S. Chand & Company, New Delhi.
References:
Gould, J.P. and C.F., Ferguson, Microeconomic Theory, All India Traveler Book Sellers, Delhi.
Koutsoyiannis, A. , Modern Microeconomics, Macmillan.
Varian, H.R. , Intermediate Microeconomics: A Modern Approach, East-west Press, New Delhi.
Stonier, A.W. and D.C. Hague, A Textbook of Economics Theory, ELBS and Longman Group, London.